SpaceX cleared in $6 Million Whistleblower Lawsuit for Wrongful Termination in Violation of Public Policy

On June 7, 2017, a jury decided in favor of Space Exploration Technologies Corp. after an 8 day trial to determine whether Jason Blasdell had been wrongfully terminated in violation of public policy. Blasdell claimed he was fired after raising concerns about SpaceX’s compliance with 18 U.S.C. Section 38, a federal statute prohibiting fraud against a customer involving aircraft or space vehicle parts. The former Avionics Test Technician working on the Falcon 9 rocket and Dragon spacecraft alleged that he had been wrongfully terminated after voicing concerns about the falsification of test results following safety testing and misrepresentations in connection with SpaceX’s multi-billion dollar contracts with customers including NASA. Specifically, Blasdell claimed that managers told him to sign off on parts quality regardless of whether he could verify their compliance with protocol. Blasdell claims he voiced his concerns to management, as far up as SpaceX President Gwen Shotwell and CEO Elon Musk.

In defense, SpaceX claimed that after a promising start at SpaceX and positive performance reviews, Blasdell became hostile, obsessive, and paranoid, traits they connected to Blasdell’s diagnosis of Attention Deficit Disorder and prescribed amphetamine use. SpaceX claimed that this disrupted other employees and rendered Blasdell incapable of satisfactorily performing his job duties, necessitating his termination. SpaceX strengthened these allegations by providing emails from other employees describing Blasdell as erratic and unpredictable. SpaceX further claimed that Blasdell never met with the President or CEO of the company and that any allegations of incorrect testing only came after he had been dismissed.

Judge William Fahey clarified that the jury in this case would not be making any decisions about SpaceX’s scientific determinations, since those choices are protected as business judgement. The jury needed only 3 hours of deliberation before finding in favor of SpaceX, that Blasdell’s firing was not “substantially motivated” by his reporting of possible violations.

Despite the adverse ruling, this case is important for whistleblowers as it is an example of a complex whistleblower case getting to a jury. Wrongful discharge in violation of public policy is often a last resort for whistleblowers whose activities do not fall neatly within one of the specific statutory protections under federal or state law. Here, the whistleblower was able to use a federal criminal statute as the public policy basis for his claim.

The wrongful discharge in violation of public policy tort is recognized in most states and can be boiled down to the following: Even in at-will employment relationships, an employer’s termination of an employee may not violate clear statements of public policy. Wrongful discharge in violation of public policy often occurs in one of three ways: (1) The employee is directed to violated a clear statement of public policy (such as a criminal law or state ethics rule, refuses to do so, and is terminated in retaliation; (2) The employee exercises a fundamental right as an employee or citizen (such as filing a workers compensation claim or voting) and is terminated for doing so; or (3) the employee blows-the-whistle on his or her employer’s conduct that violates a clear public policy (such as a criminal or civil statute). In such cases, an employee may be able to recover lost wages, non-economic damages, and other equitable relief.